Understanding How Digital Finance Will Impact the Investment Landscape

© 2018 Dara Albright Media, All Rights Reserved
By Dara Albright,
President of Dara Albright Media & Co-founder of
FinTech Revolution TV
March 26, 2018

@ToTheStoics | @FinTechRevTV
@DaraAlbrightMedia
www.Linkedin.com/in/DaraAlbright
Speaker, writer and influencer on topics
relating to FinTech, RegTech, digital-, peer-
& crowd- finance
About Dara Albright
www.daraalbrightmedia.com
www.fintechREVOLUTION.tv

Predicting the Direction of the Stock Market
is as Easy as Identifying the latest Trends

Spring 2018 Fashions Per Vogue Magazine

Instead of Hemlines, I Look at Innovation:
• Technological Innovation
• Regulatory Innovation
• Innovations in Mass Communications

THE DIGITAL FINANCE REVOLUTION IS
POWERING THE GREATEST
OPPORTUNITY FOR WEALTH CREATION
IN THE HISTORY OF FINANCE

It is redefining how we invest, raise funds,
borrow, lend, pay for goods and services and
save for retirement. It is reinventing
currency, fashioning new asset classes,
democratizing the flow of capital and giving
rise to an entirely new generation of tech-
centric financial leaders.

1. FinTech The reduction in transaction costs
2. RegTech Modern securities legislation being introduced to
support advancing financial technology
3. AltTech Investment product innovation
4. MediaTech Democratization of journalism, the rise of new voices and the ability to
rapidly spread their messages
5. AdvisorTech The future of the retail brokerage industry
Five Key Dynamics which are Utterly
Redefining Finance

“FinTech”
“Technology has been dislocating financial services for decades. We are only now just reaching that seminal
moment where instead of disrupting the brokerage industry, technology will utterly obsolete it.”
• Since the 1970s, discount brokerage firms have been
using technology to drive down the transactions costs
of conventional assets. This same principle is now
being applied to the alternative asset world.
• Advancement in Micro-Technologies will empower
the consumer/retail investor. Anyone can now:
• Diversify within asset classes
• Diversify across a wider range of asset classes
• Access higher yielding alternative products
• Customize one’s own “mutual funds”
• Mitigate portfolio risk

“RegTech”
“Finally, securities legislation is catching up to technology.”
“While FinTech makes it cost-effective for micro-investors to access alternative investment
products, RegTech is what makes it legal.”

The Masses Are Uprising

They Are Demanding Wealth Equality

They are Demanding Investing Equality

They’re sick of crappy returns
5 Year Returns of “High” Yield Bond ETFs

They’re sick of extreme volatility

They want stability
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
AHP Fund (Mortgage Debt) StreetShares (Small Business Lending) GROUNDFLOOR (real estate lending platform)
Returns in the Reg A+ Debt Universe
2015 2016

They’re demanding the Small Cap IPO Returns of Yesteryear

Twitter’s Post-IPO Growth (Decline)

Twitter’s Pre-IPO Growth
© 2013 Dara Albright

The Math
FinTech + RegTech = AltTech

FINTECH & REGTECH ARE INSPIRING AN ENTIRELY
NEW GENERATION OF RETAIL INVESTMENT PRODUCTS

A New Universe of Alternative Debt Products
Satisfying the Appetite for Yield and in some cases even liquidity
JoinWorthy.com

Reg A+ IPOs – The Small Cap IPO of Yesteryear?

Retail Investors Have Been Losing Interest in
Stocks
despite a 9 year bull market where the S&P 500 saw gains in excess of 300%
• U.S. households have $900 billion less invested in stocks today than
they did in 2007 - Goldman Sachs
• Demand for Equity-only Funds have steadily declined since 2007
• Investors now hold an average of 52.4% in equity-only funds, down from the
64.7% percent they held in 2007- Fidelity
• Demand for Managed Equity Funds have significantly declined
• Passive funds now comprise about 46% of total mutual fund and ETF assets,
compared with just 8 percent in early 2008 - Morningstar.
• There is $5.4 trillion in AUM in passive funds, up from $1.2 trillion in 2007-
Lipper.

Is Crypto the “Equity” Investment Choice of
the Future?

Modern Methods for Accessing
Modern Investing Products

• People are more connected than ever before and they are getting their
products, investment ideas and even their news from non-traditional
sources.
• This phenomenon is having epic implications on consumption/retail,
finance and even politics.
A Phenomenon in Global Communications
“And once you get instantaneous communication with everybody, you have
economic activity that's far more advanced, far more liquid, far more
distributed than ever before.” - Marc Andreessen, Netscape Founder, Renowned
Venture Capitalist and Visionary

“MediaTech”
The rise of new voices and influencers and the spread of their
messages through technology

“AdvisorTech”
Just like media, traditional distribution channels are being displaced.
New retail distribution channels are obsoleting old ones

The Future of Personal Finance

Investors’ Asset Appetites are
Changing

Investor Mindsets are Changing

There will be a seismic shift in
how Americans Plan for
Retirement

The Economic Recovery Tax Act signed into law on
August 13, 1981

This legislative change dislocated America's entire
retirement infrastructure and simultaneously created
the most remarkable asset distribution channel in the
history of finance…
until now

$241B
$636B
$1.3T
$2.6T
$3.7T
$4.8T
$7.3T
$385B $900B
$1.7T
$2.4T
$3.1T
$4.7T
$448M $2.5B $17B $47.6B $134.8B
$495.4B
$1.1T
$2.8T
$6.9T
$8.9T
$11.8T
$15.6T
0
2
4
6
8
10
12
14
16
18
1940 1950 1960 1970 1980 1990 2000 2010 2020
Trillions
IRA Assets 401k Assets Mutual Fund Assets
1
9
8
1
Today the mutual fund industry is valued at over $15 trillion and is comprised of over 9,500 funds. The
combined retail retirement market is valued at approximately $14 trillion.
© 2016 Dara Albright MediaSources: Investment Company Institute, Cerulli Associates, US Dept of Labor, IRS Statistics of Income, Federal Reserve Board

Like the 1980s, we are once again witnessing significant legislative
changes, technological advancements and ideological investing shifts –
all in unison
The 1980s
• The PC revolution was in its infancy
• Discount brokerages were on the
rise and beginning to invest heavily
into technology to make retail
investing cheaper & easier
• Asset Shift – capital moving into
funds, especially bond funds
• Mutual Funds were the only
diversification game in town for
retail investors
TODAY
• The app revolution is in its infancy
• Marketplace Finance & Digital Apps
are proliferating – making
alternative micro-investing
cheaper, simpler & more accessible
• Asset Shift - capital shifting from
mutual funds & ETFs to alternatives
• Micro-investing Technologies is
establishing more proficient
diversification strategies for retail

But this time with the marriage between a new generation of “non-exchange
traded alternative mutual funds” and “modernized hi-tech retirement vehicles”
HISTORY IS REPEATING
Non-Exchange Traded Alternatives
(aka Crowd-centric retail alternatives):
• P2P Notes
• P2B Products
• P2RE Products
• New Crowdfinanced Offerings
Modernized “Hi-Tech”
Self-Directed IRA

@ToTheStoics | @FinTechRevTV
@DaraAlbrightMedia
www.Linkedin.com/in/DaraAlbright
Speaker, writer and influencer on topics
relating to FinTech, RegTech, digital-, peer-
& crowd- finance
About Dara Albright
www.daraalbrightmedia.com
www.fintechREVOLUTION.tv
Thank you!
Let’s connect:

Understanding How Digital Finance Will Impact the Investment Landscape

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

Similaire à Understanding How Digital Finance Will Impact the Investment Landscape

Similaire à Understanding How Digital Finance Will Impact the Investment Landscape (20)

Plus de Dara Albright

Plus de Dara Albright (11)

Dernier

Dernier (20)

Understanding How Digital Finance Will Impact the Investment Landscape